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Crowdfunding versus Traditional Banking: Alternative or Complementary Systems for Financing Projects in Portugal?

Author

Listed:
  • Bruno Torres

    (NECE-UBI, Research Centre for Business Sciences, Department of Management and Economics, University of Beira Interior, 6201-001 Covilhã, Portugal)

  • Zélia Serrasqueiro

    (Department of Management and Economics—CEFAGE-UBI, University of Beira Interior, 6201-001 Covilhã, Portugal)

  • Márcio Oliveira

    (NECE-Research Center in Business Sciences, University of Beira Interior, 6201-001 Covilhã, Portugal
    School of Education and Social Sciences, Polytechnic of Leiria, 2411-901 Leiria, Portugal)

Abstract

In an era where crowdfunding in Portugal is garnering increased public attention, exemplified by notable campaigns like the recent funding of the nurses’ strike, we explore its potential as an alternative financial source to traditional banking. Through a comprehensive case study, we delve into pertinent issues, encompassing European legislation, market dynamics, and a survey disseminated to representatives of the four prominent Portuguese crowdfunding platforms. Comprising forty-one questions across four categories, the survey extracts insights on platform details, company/project information, investor perspectives, and the financing process, along with an evaluation of platform advantages/disadvantages vis-à-vis traditional banking. Despite heightened visibility, crowdfunding remains relatively unfamiliar to the broader public, yet it diverges from banking not as a substitute but as a complementary financial mechanism. Emphasizing accessibility, process agility, and reduced bureaucracy, crowdfunding serves as a means of swiftly gaining recognition for a company or project while tapping into a broad audience. Rather than competition, it offers supplementary support, facilitating the identification and validation of investment opportunities and concepts. Moreover, it streamlines subsequent interactions with banks and investors, enhancing confidence in a project’s viability. In essence, crowdfunding emerges not as an alternative but a strategic complement, enriching the financial landscape with its unique attributes.

Suggested Citation

  • Bruno Torres & Zélia Serrasqueiro & Márcio Oliveira, 2024. "Crowdfunding versus Traditional Banking: Alternative or Complementary Systems for Financing Projects in Portugal?," IJFS, MDPI, vol. 12(2), pages 1-16, March.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:2:p:33-:d:1366493
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    References listed on IDEAS

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    1. Ajay Agrawal & Christian Catalini & Avi Goldfarb, 2015. "Crowdfunding: Geography, Social Networks, and the Timing of Investment Decisions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(2), pages 253-274, June.
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